Russian investments in the United States: Hardening the target

of Russian billionaire Vladimir Potanin – who made his fortune in metals and mining– made the news recently because in 2015 it bought a company that has the contract to store Maryland’s statewide list of eligible voters on its servers.  Governor Larry Hogan has stated that Maryland was unaware of Potanin’s ownership until informed by the FBI. The contract still appears to be in effect. The same company has also won data center work for the Department of Defense and the Department of Labor.  Another data center company in which Altpoint has invested received an Energy Department contract last year.

The concerns posed by opaque private investment funds extend to allegations of espionage, as described by Zachary Dorfman in Politico Magazine in July. “Because of increasing Russian and Chinese aggressiveness, and the local concentration of world-leading science and technology firms, there’s a full-on epidemic of espionage on the West Coast right now,” Dorfman wrote. “And even more worrisome, many of its targets are unprepared to deal with the growing threat.”

Dorfman’s article cites as an example Rusnano USA, the U.S. affiliate of Rusnano, a Russian state-owned entity focused on nanotechnology. Anonymous former U.S. intelligence officials quoted in the story say Rusnano USA has been used both to facilitate “the acquisition of technology” and “as an intelligence platform, from which [Russia] launched operations.” Rusnano and Rusnano USA have made a broad array of investments in the United States, often in biotech or semiconductors. According to a Russian state-owned media outlet, Rusnano’s U.S. holdings topped $1 billion in 2013.

The vulnerabilities presented by private investment funds are not limited to risk from Russia, China, or geopolitical adversaries. These vehicles have featured prominently in three of the largest public corruption cases in recent years. The Justice Department’s civil forfeiture complaint seeking to recover assets allegedly stolen from Malaysia’s state-owned development company, known as 1Malaysia Development Berhad or 1MDB, claims that hundreds of millions of